When you're trying to win a bidding war, sometimes you need to take your case directly to the shareholders. That's exactly what Paramount Skydance (PSKY) CEO David Ellison did this week, meeting with major Warner Bros. Discovery (WBD) investors in New York to make his pitch.
Ellison, accompanied by senior legal and strategy executives, spent Tuesday trying to convince WBD shareholders that Paramount's $108 billion all-cash hostile bid is the better choice compared to Netflix's (NFLX) $82.7 billion cash-and-stock offer. According to a Financial Times report, a key focus was easing concerns about Paramount's financing structure, particularly its reliance on Middle Eastern investors.
Why Some Investors Are Leaning Toward Paramount
Here's the thing: the meetings seem to have worked. Several WBD shareholders walked away with a favorable impression of Paramount's proposal, viewing it as potentially simpler and faster to clear regulatory hurdles than Netflix's offer, according to the FT report.
Some investors even said they'd be inclined to tender their shares under Paramount's bid unless Netflix improves its price or structure. That's a meaningful shift in sentiment, and it puts pressure on Netflix to sweeten its deal.
Not to be outdone, Netflix was also meeting with WBD shareholders this week, according to FT. Neither Paramount, Netflix, nor Warner Bros immediately responded to requests for comment.
Breaking Down the Competing Offers
Netflix's bid includes $23.30 in cash and $4.50 in Netflix stock per WBD share. Notably, the streaming giant would not acquire WBD's traditional television channels, including CNN.
Meanwhile, Paramount has signaled that its $30 per share offer is not its "best and final" offer. The company is privately considering either a price increase or additional regulatory assurances to sway WBD's board, the FT reported.
The timeline is tight. Shareholders have until Jan. 8 to respond to Paramount's tender offer, while WBD's board must issue its own response by Dec. 22.
Market Reaction and the Trump Factor
The bidding war has been great for WBD shareholders. The stock has surged over 130% to $28.26 as of Tuesday's close, according to data from Benzinga Pro. On the flip side, PSKY shares have dropped 7.25% to $14.64 over the past five days, while NFLX stock has shed 9.4% to $96.40 in the same period.
This has evolved into a rare Hollywood showdown where financing structures, regulatory risk, and deal speed may matter as much as the actual price tag. And there's another wrinkle: President Donald Trump has indicated he intends to play a direct role in the federal review of Netflix's bid, noting that the merged company could command a "very big market share" that may raise regulatory concerns.
WBD's investors now hold the leverage in a bidding war that could redraw the entertainment landscape. With both suitors actively courting shareholders and the regulatory picture still uncertain, this contest is far from over.
